Higher air fares predicted as Pacific Blue pulls out

The travel industry is warning that higher airfares are likely because of Pacific Blue's exit from the domestic market.

The airline will stop domestic flights by October and will instead concentrate on trans-Tasman services.

The Flight Centre and House of Travel expect prices to go up on domestic routes, especially in areas where one airline has the monopoly.

Consumer New Zealand chief executive Sue Chetwin agrees, and says travellers should start looking out for cheap domestic fares now. She anticipates that there will be fewer rock-bottom deals by the end of the year.